Andrew Spratt, Associate at A&L Goodbody, outlines practical steps to reduce risk with termination of employment.

Look into the Contract of Employment

The first port of call for an employer when considering the termination of an employee's employment should always be the employee's contract of employment. Provided that the contract has been dated and signed correctly, the procedure for removal may be more straightforward, specifically if the employee has been engaged for a period of less than one year as most dismissals by an employer within this time period will be protected from claims for unfair dismissal. (There are of course some important exceptions to this rule e.g. discrimination, whistleblowing, reason related to pregnancy).

The Contract should also indicate the period of notice which must be given to an employee, this may simply be in line with the statutory minimum period, however, for more senior/valuable individuals it may be considerably more than that. The Contract should also confirm a right for the employer to make a payment in lieu of notice and also the ability to place an employee on a period of garden leave. A failure to make a payment in lieu of notice would give rise to a breach of contract and give rise to an actionable claim for Wrongful Dismissal.

Potentially Fair Reasons

As most readers will be aware there are 5 potentially fair reasons for dismissal in accordance with Article 130 of the Employment Rights (Northern Ireland) Order 1996 these are stated as being:
1.Conduct
2. Capability
3. Redundancy
4. Contravention of a Statutory Provision
5. Some Other Substantial Reason.

In respect of each of these headings and particularly in respect of the first three, there needs to be an employer's policy in place which sets out the procedure which is to be followed in each circumstance to ensure that there is procedural fairness when dealing with matters of Conduct, Capability and Redundancy.

In respect of Conduct there needs to be a policy in place which demonstrates to an employee the type of standards of behaviour which are expected from them but also which will not be. But having a policy in place is only part of the process and it is necessary to ensure that employees are trained in respect of that policy and whenever or wherever a policy is updated, this is also communicated to all employees.

Dismissals on the ground of Capability again need to demonstrate procedural fairness. For this reason, an immediate dismissal because an employee's work is not at the expected standard without attempting to understand the reason for the failing or to assist in remedying that failure is likely to cause an employer difficulty further down the line; and ultimately, could result in an Industrial Tribunal claim.

For that reason we would almost invariably recommend that a Performance Improvement Plan is instigated with SMART objectives included within the plan. The plan should illustrate specific, measurable, attainable, realistic and timely goals and seek the agreement of the employee who is the subject of such a scheme. The focus should always be on the improvement of performance in the hope that an employee will embrace the scheme and attain the standard required of them.

When dismissing an employee by way of Redundancy care needs to be taken by employers to ensure that there is fairness in the process, including identifying whether there is a need to make redundancies and also to ensure that dismissal by way of redundancy is only carried out as an act of last resort having consulted with affected employees and having considered all alternatives to redundancy.

The other two reasons of a dismissal for the Contravention of a Statutory Provision and Some Other Substantial Reason (SOSR) are used less often, however as a word of warning, if it is the case that an employer is only seeking to rely on the effectively 'catch all' provision of SOSR then an employer will be put to strict proof to provide their rationale for such a dismissal if a claim is presented to an Industrial Tribunal. If SOSR is the only reason for dismissal, extra care should be exercised by an employer to ensure their process and rationale for dismissal is exemplary.

Statutory Dismissal Procedure

Until such time as there is political will and movement in Northern Ireland we remain bound by the Statutory Dismissal Procedures contained within Employment (Northern Ireland) Order 2003 and Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (Northern Ireland) 2004 and the well-trodden and understood three step procedure to be followed when an employer is contemplating taking disciplinary action which might include dismissal.

Most employers will be well aware of these provisions, but simply by way of reminder, a failure to follow these procedures (except in limited circumstances) when a dismissal occurs, will lead to an automatic finding of unfair dismissal and a potential uplift of any award from a tribunal of up to 50%.

Beware of Discrimation Afterwards

Finally, even if a dismissal has been effected fairly and correctly there is still a risk to an employer by what is said and done by remaining employees. The most prevalent example of this is whereby an employer provides adverse information about a former employee. If this adverse information comes to light and leads to the former employee not obtaining work or has an adverse impact in their new role, this can give rise to a claim for discrimination by the former employee.

To alleviate this potential problem an employer should have in place a clear policy in respect of the provision of references post-termination. Ideally there should be one point of contact who will address all requests for references and clear guidance as to what, if any, remaining employees can and cannot provide in respect of references to former colleagues.